The Centre for the Promotion of Private Enterprise (CPPE) has urged the House of Representatives to decline concurrence to the Sugar-Sweetened Beverage Tax Bill.
CPPE, in a statement signed by its director, Muda Yusuf, on Sunday, described the bill as “ill-timed, insensitive to prevailing economic realities, and inconsistent” with the federal government’s commitment to reducing the tax burden on businesses.
“The House of Representatives has historically demonstrated sensitivity to the welfare of citizens and the concerns of productive enterprises.
“We urge members to uphold that tradition by rejecting this legislation in the interest of manufacturing sustainability, employment preservation, investment confidence and policy coherence,” Mr Yusuf said.
The think tank said that at a time when government policy is focused on easing the cost of doing business and revitalising manufacturing, the bill seeks to impose an additional layer of taxation on non-alcoholic beverage manufacturers, thereby worsening cost pressures across the value chain.
Threat to manufacturing
The food and beverage industry is one of the strongest pillars of Nigeria’s industrial economy, accounting for a significant proportion of manufacturing output and jobs.
Mr Yusuf said its extensive linkages with agriculture, packaging, logistics, retail trade, hospitality and distribution make it a powerful engine of inclusive economic activity.
He said the non-alcoholic beverages subsector is a major contributor to this ecosystem and should be supported, not burdened with additional taxation.
“Any additional tax burden on the industry would inevitably increase production costs, raise consumer prices, weaken demand, reduce capacity utilisation and threaten jobs across the value chain.
“At a time when the economy needs stronger industrial growth, this Senate proposal risks becoming a tax on production, investment and employment,” he said.
Policy inconsistency concerns
CPPE said the proposed legislation also runs contrary to the spirit of the ongoing fiscal and tax reforms designed to create a more investment-friendly business environment.
The think tank said that the 2026 fiscal policy framework already provides for an excise duty of N10 per litre on non-alcoholic beverages.
CPPE said further escalation of the tax burden through additional legislation would create policy inconsistency, heighten regulatory uncertainty and undermine investor confidence.
“Investors thrive on predictability. Frequent additions to the tax burden send the wrong signal to both existing and prospective investors.”
Limited health benefits
CPPE said it recognised the importance of addressing the growing incidence of diabetes and other non-communicable diseases in the country.
However, the think tank said available evidence suggests that sugar taxes, on their own, deliver limited public health outcomes.
“The major drivers of diabetes and related health conditions in Nigeria include poor dietary habits, excessive consumption of carbohydrate-rich foods, physical inactivity, sedentary lifestyles, inadequate health awareness and genetic predisposition.
“Taxation does little to address these underlying factors. What it achieves is an immediate increase in production costs, higher consumer prices and additional pressure on investment and employment,” he said.
Mr Yusuf said if the objective is to improve public health outcomes, lawmakers should prioritise legislation that directly addresses the root causes of lifestyle-related diseases.
These, he said, include nutrition education, public health awareness campaigns, promotion of exercise and physical activity, encouragement of healthier food choices, improved preventive healthcare systems, and urban planning that supports active living through walking and cycling infrastructure.
He said such interventions are more sustainable, more inclusive and less damaging to economic activity than punitive taxation targeted at a major manufacturing subsector.
“Public health goals should not be pursued through policies that inadvertently weaken production, investment and job creation.
“At a time when businesses and households are struggling with unprecedented cost pressures, the economy needs relief, not additional taxation; support for production, not policies that weaken enterprise; and reforms that create jobs, not measures that put them at risk,” Mr Yusuf said.
He said public health objectives and economic growth are not mutually exclusive, noting that Nigeria can pursue both through policies that promote healthier lifestyles while protecting investment, jobs and industrial development.
“The Sugar-Sweetened Beverage Tax Bill fails this test and should therefore be rejected in its entirety,” Mr Yusuf said.
